Cambridge Centre for Risk Studies helped Nestlé define their methodology and provide a climate modeling tool for their TCFD report.
In 2019, Nestlé pledged to achieve net zero greenhouse gas (GHG) emissions across their value chain. In 2020, in their Net Zero Roadmap, they specified their plan to halve Nestlé’s GHG emissions by 2030 and to achieve net zero by 2050.
Nestlé’s assessment was led by an internal working group representing various businesses and functions. This working group partnered with the University of Cambridge’s Centre for Risk Studies to define the methodology and build a climate modeling tool.
Modeling simulations evaluated the potential directional impacts on Nestlé for both transition and physical risk factors. The risk categorization is aligned with TCFD recommendations.
The model incorporated Nestlé’s physical and commercial footprints:
- Physical data including volumes and sourcing locations of raw material, facility locations, production volumes and distribution of finished goods
- Commercial data including sales and profit by market
- Scenarios were built using publicly available data sources, including assessments and reports by the Intergovernmental Panel for Climate Change (IPCC) and International Energy Agency (IEA) on climate emission pathways.
- The time horizon used was a medium-term outlook of five years. In the longer-term (10 years and beyond), the risks are highly uncertain and unpredictable, particularly in the context of how the transition to a lower-carbon economy may evolve.